Florida price gouging by the airlines?

by on September 10, 2017 at 2:40 pm in Economics, Travel | Permalink

Maybe, but consider this:

Airfare data by Hopper shows that the price hikes that took place this past week are similar to those from two weeks ago, suggesting that the price changes are typical for a week of departure flights.

Here is the full NYT story.

1 Ikstore September 10, 2017 at 3:32 pm

Yes

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2 Ethan Allen September 10, 2017 at 9:22 pm

Allen Edmond is the Duke of Tarentam?

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3 A clockwork orange September 11, 2017 at 12:16 am

When was the first restaurant in Poland?

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4 Tech September 10, 2017 at 3:33 pm

Cool And great Keep it up

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5 Al September 10, 2017 at 4:09 pm

Indeed.

The notion that “price gauging” is somehow harmful is a concept that needs to die, painfully.

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6 Brock September 10, 2017 at 4:37 pm

…brilliant Florida legislators, Governor, Attorney General, and apparently all state officials disagree with you:

“Florida Statute 501.160 states that during a state of emergency, it is unlawful to sell, lease, offer to sell, or offer for lease essential commodities, dwelling units, or self-storage facilities for an amount that grossly exceeds the average price for that commodity during the 30 days before the declaration of the state of emergency, unless the seller can justify the price by showing increases in its prices or market trends. Examples of necessary commodities are food, ice, gas, and lumber.”

These brilliant Florida rulers are also now imposing mandatory ‘curfews’ against everybody (emergency personnel excepted). Orlando curfew starts today at 5 P.M.
Apparently the 5th Amendment does not apply in Florida.

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7 Ray Lopez September 10, 2017 at 4:00 pm

Nice, me and TC think alike, great minds. I am coincidentally re-reading Petzinger’s “Hard Landing” about the airline industry pre-deregulation, it’s surprisingly good so far.

Bonus trivia: Herb Kellerher, founder of Southwest airlines, like McGowan the founder of MCI, won most of his big business battles in the courtroom, not the marketplace. Kellerher managed to convince the US Civil Avionics Board that the original Southwest was an ‘intra-state’ carrier not subject to the CAB. But the US Sup. Ct. case of Wickard v. Filburn (1942) was against Southwest (symbol: LUV after Love field in Dallas) yet various courts, sympathetic to Kellher’s lawyers, refused to use it. So by a series of legal decisions Southwest was allowed to live, and the rest is history. LUV also used blatantly sexist with their airline stewardesses, to get publicity. The rest of the carriers also did the same thing; Braniff Airways in 1965 made stewardesses peel away layers of their uniforms during the course of a flight, in a choreographed procedure called an “air strip”.

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8 Gary Leff September 10, 2017 at 4:25 pm

The Petzinger book is the single best thing written ever about the business of aviation in the United States. I don’t think you’ve got a fair read of Southwest though. There were already intra-state airlines before Southwest not subject to CAB regulation. Kelleher gets too much credit for Southwest though, he didn’t take over as President until six or seven years into the life of the airline – the company mostly wrote Lamar Muse out of its history books.

Not noted in the NYT article is that after airlines were getting criticized for their algorithms doing their usual job, jacking up the price of the last few seats on a plane as they always do, they imposed price caps eg JetBlue and American set theirs at $99 one-way for non-stop flights out of Florida. Both Delta and American brought in extra capacity out of Florida, too, although American’s Miami operation didn’t handle it especially way and several flights unexpectedly cancelled for lack of crew (and there weren’t staff to offload bags, either).

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9 Gary Leff September 10, 2017 at 4:33 pm

I take it back, the price caps are mentioned in the last paragraph of the article.

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10 Dragos Lipan September 10, 2017 at 8:48 pm

Ray is Thiago’s manager. The secret is out. In 2014, they schemed to sell their Romanian forest to Harvard. In 2015, Ikea came on the scene. They agreed to buy 33k hectares from Harvard for 62 Mil, now Ikea and Harvard have both been sold toxic assets from Dragos and Ray.

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11 athEIst September 13, 2017 at 9:37 pm

Ray, I’m not understanding this. I know Wickard v. Filburn was not just about wheat but about defining all commerce as interstate commerce but am unsure how this would apply to an airline which sells a service. Also do you have a source for “the rest is history” cause I’m having a hard time finding it.

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12 Velo September 10, 2017 at 6:55 pm

If people don’t like price gouging, that is, the taking advantage of people when they are at their most desperate and vulnerable, then why are doctors considered so high status?

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13 Steve S September 10, 2017 at 8:24 pm

Because “taking advantage of people at their most vulnerable” is the default case for medicine and its pricing. Home Depot has proven they can be profitable by selling you a generator for $500 in March, it is seen as cruel if you raise the price to $1,000 because we know the extra is pure profit. Not that I agree with anti-price gougers…

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14 Jay September 10, 2017 at 6:56 pm

Whenever I hear someone rail against “price gouging” I have sufficient information to conclude they are a low IQ Neanderthal and I won’t waste my time on them.

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15 James Liu September 10, 2017 at 8:39 pm

Honestly, I think people suddenly discovered about the high price of last minute air travel and disliked the price and so screamed price gouging.

I think eventually the equilibrium will be that people will come to accept surge pricing for emergencies, with the expectation that if it’s really a bad emergency, Uber (meaning all Uber customers) will pay the marginal surge with a refund. But the surge price will still be a useful signal because to customers because it may not be considered a real emergency. It amounts to a tax to pay for emergency responders.

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16 jorod September 11, 2017 at 9:29 pm

Flights out of Florida are full. But flights into Florida are empty. How do you cover the costs of operating both flights? The company still has to cover the cost of fuel, crew, maintenance, landing fees, safety, etc. Many costs remain the same while revenue falls. Not rocket science.

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